Characteristics of minimum wage workers, 2017

In 2017, 80.4 million workers age 16 and older in the United States were paid at hourly rates, representing 58.3 percent of all wage and salary workers. Among those paid by the hour, 542,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.3 million had wages below the federal minimum. Together, these 1.8 million workers with wages at or below the federal minimum made up 2.3 percent of all hourly paid workers.

The percentage of hourly paid workers earning the prevailing federal minimum wage or less declined from 2.7 percent in 2016 to 2.3 percent in 2017. This remains well below the percentage of 13.4 recorded in 1979, when data were first collected on a regular basis. (See table 10.)

This report presents highlights and statistical tables describing workers who earned at or below the federal minimum wage in 2017. The data are obtained from the Current Population Survey (CPS), a national monthly survey of approximately 60,000 households conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics (BLS). Information on earnings is collected from one-fourth of the CPS sample each month.

The CPS does not include questions on whether workers are covered by the minimum wage provisions of the federal Fair Labor Standards Act (FLSA) or by individual state or local minimum wage laws. The estimates of workers paid at or below the federal minimum wage are based solely on the hourly wage they report, which does not include overtime pay, tips, or commissions. See the accompanying technical notes section for more information, including a description of the source of the data and an explanation of the concepts and definitions used in this report.

Highlights

The following are highlights from the 2017 data:

Age. Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 8 percent earned the minimum wage or less, compared with about 1 percent of workers age 25 and older. (See tables 1 and 7.)

Gender. Among workers who were paid hourly rates in 2017, about 3 percent of women and about 2 percent of men had wages at or below the prevailing federal minimum. (See table 1.)

Race and Hispanic or Latino ethnicity. The percentage of hourly paid workers with wages at or below the federal minimum differed little among the major race and ethnicity groups. About 3 percent of African American or Black workers earned the federal minimum wage or less. Among White, Asian, and Hispanic workers, the percentage was about 2 percent. (See table 1.)

Education. Among hourly paid workers age 16 and older, about 4 percent of those without a high school diploma earned the federal minimum wage or less, compared with about 2 percent of those who had a high school diploma (with no college), about 2 percent of those with some college or an associate degree, and about 1 percent of college graduates. (See table 6.)

Marital status. Of those paid an hourly wage, never-married workers, who tend to be young, were more likely (4 percent) than married workers (1 percent) to earn the federal minimum wage or less. (See table 8.)

Full- and part-time status. About 6 percent of part-time workers (persons who usually work fewer than 35 hours per week) were paid the federal minimum wage or less, compared with about 1 percent of full-time workers. (See table 1.)

Occupation. Among major occupational groups, service occupations had the highest percentage of hourly paid workers earning at or below the federal minimum wage, at about 7 percent. About two-thirds of workers earning the minimum wage or less in 2017 were employed in service occupations, mostly in food preparation and serving related jobs. (See table 4.)

Industry. The industry with the highest percentage of workers earning hourly wages at or below the federal minimum wage was leisure and hospitality (11 percent). About three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants and other food services. For many of these workers, tips may supplement the hourly wages received. (See table 5.)

State of residence. The states with the highest percentages of hourly paid workers earning at or below the minimum wage were in the South: Kentucky, Mississippi, Tennessee, South Carolina, Louisiana, and Virginia (all were about 4 percent). The states with the lowest percentages of hourly paid workers earning at or below the federal minimum wage were in the West or Midwest: California, Washington, Montana, and Minnesota (all were less than 1 percent). It should be noted that many states have minimum wage laws establishing standards that exceed the federal minimum wage. (See tables 2 and 3.)

Footnotes(1) Estimates for the above race groups--White, Black or African American, and Asian--do not sum to totals because data are not presented for all races. Persons whose ethnicity is identified as Hispanic or Latino may be of any race.(2) The distinction between full- and part-time workers is based on hours usually worked. These data will not sum to totals because full- or part-time status on the principal job is not identifiable for a small number of multiple jobholders. Full time is 35 hours or more per week; part time is less than 35 hours.

Note: Data exclude all self-employed persons whether or not their businesses are incorporated. Source: U.S. Bureau of Labor Statistics.

Note: Data exclude all self-employed persons whether or not their businesses are incorporated. These data are based on a sample and therefore are subject to sampling error; the degree of error may be quite large for less populous states. Source: U.S. Bureau of Labor Statistics.

Note: Data exclude all self-employed persons whether or not their businesses are incorporated. Estimates of usual hours worked presented in this table differ from usual full- or part-time status (as shown in table 1) because of a sizable number of workers whose usual hours vary on the primary job. Source: U.S. Bureau of Labor Statistics.

Footnotes(1) Data for 1990-1991, 1996-1997, and 2007-2009 reflect changes in the minimum wage that took place in those years.

Note: The comparability of historical labor force data has been affected at various times by methodological and conceptual changes in the Current Population Survey (CPS). Information about historical comparability is available at https://www.bls.gov/cps/documentation.htm#comp. Source: U.S. Bureau of Labor Statistics.

Technical Notes

The estimates in this report were obtained from the Current Population Survey (CPS), which provides information on the labor force, employment, and unemployment. The survey is conducted monthly for the U.S. Bureau of Labor Statistics (BLS) by the U.S. Census Bureau using a scientifically selected national sample of about 60,000 eligible households in all 50 states and the District of Columbia. The survey also provides data on earnings, which are based on one-fourth of the CPS monthly sample and are limited to wage and salary workers. All self-employed workers, both incorporated and unincorporated, are excluded from these earnings estimates.

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Concepts and definitions

The principal definitions used in connection with the estimates of minimum wage workers presented in this report are described briefly below.

Wage and salary workers. These are those age 16 and older who receive wages, salaries, commissions, tips, payments in kind, or piece rates on their sole or principal job. This group includes employees in both the private and public sectors. All self-employed workers are excluded whether or not their businesses are incorporated.

Workers paid by the hour. These are wage and salary workers who report that they are paid at an hourly rate on their job. Historically, workers paid an hourly wage have made up approximately three-fifths of all wage and salary workers. Estimates of workers paid by the hour include both full- and part-time workers unless otherwise specified.

Hourly earnings. Data are for wage and salary workers who are paid by the hour and refer to a person’s sole or principal job. Hourly earnings for hourly paid workers do not include overtime pay, commissions, or tips received.

Workers paid at or below the prevailing federal minimum wage. The estimates of the numbers of workers with reported earnings at or below the federal minimum wage pertain only to workers who are paid hourly rates. Salaried workers and the other nonhourly paid workers are excluded.

Regular collection of earnings data in the basic CPS began in 1979. The prevailing federal minimum wage for 1979 and later years is listed below:

Federal minimum wage

Effective date

$2.90

January 1, 1979

$3.10

January 1, 1980

$3.35

January 1, 1981

$3.80

April 1, 1990

$4.25

April 1, 1991

$4.75

October 1, 1996

$5.15

September 1, 1997

$5.85

July 24, 2007

$6.55

July 24, 2008

$7.25

July 24, 2009

Estimates of the annual average number of minimum wage workers for years when the minimum wage increased reflect both minimum wage levels in effect during the year. For example, data for 2007 reflect the number of workers at or below the federal minimum of $5.15 for January to July and $5.85 for August to December.

Full-time workers. People who usually work 35 hours or more per week at their sole or principal job are defined as working full time.

Part-time workers. People who usually work fewer than 35 hours per week at their sole or principal job are defined as working part time.

Race. In the survey process, race is determined by the household respondent. In accordance with the Office of Management and Budget guidelines, White, Black or African American, Asian, American Indian or Alaska Native, and Native Hawaiian or Other Pacific Islander are terms used to describe a person’s race. The latter two race groups and people who selected more than one race are included in totals but not separately identified in this report because the number of survey respondents is too small to develop estimates of sufficient quality.

Hispanic or Latino ethnicity. These are people who identified themselves in the survey process as being of Hispanic, Latino, or Spanish origin. People whose ethnicity is identified as Hispanic or Latino may be of any race.

Interpreting minimum wage data

The CPS does not determine whether workers are covered by the minimum wage provisions of the federal Fair Labor Standards Act (FLSA) or by individual state or local minimum wage laws. The estimates of workers paid at or below the federal minimum wage are based solely on the hourly wage that respondents report (which does not include overtime pay, tips, or commissions). It should be noted that some respondents might round hourly earnings when answering survey questions. As a result, some workers might be reported as having hourly earnings above or below the federal minimum wage when, in fact, they earn the minimum wage.

Some workers reported as earning at or below the prevailing federal minimum wage may not, in fact, be covered by federal or state minimum wage laws because of exclusions and exemptions in the statutes. Thus, the presence of workers with hourly earnings below the federal minimum wage does not necessarily indicate violations of the FLSA or state statutes in cases where such standards apply.

Estimates of the number of minimum wage workers in this report pertain only to workers who are paid hourly rates. Salaried workers and other workers who are not paid by the hour are excluded, even though some have earnings that, if converted to hourly rates, would be at or below the federal minimum wage. Consequently, the estimates presented in this report likely underestimate the actual number of workers with hourly earnings at or below the minimum wage. BLS does not routinely estimate the hourly earnings of workers not paid by the hour because of data-quality concerns associated with constructing such an estimate.

A number of states have established minimum wage rates that exceed the federal level. (Information on state minimum wage laws is available at www.dol.gov/whd/minwage/america.htm.) Users should be cautious about comparing state estimates in this report because of differing statutory minimum wages. It also should be noted that the CPS sample is based on residence; workers report their earnings on their job, which may or may not be located in the same state in which they live. In addition, the degree of sampling error may be quite large for some state estimates.

Reliability

Statistics based on the CPS are subject to both sampling and nonsampling error. When a sample, rather than the entire population, is surveyed, there is a chance that the sample estimates may differ from the true population values they represent. The component of this difference that occurs because samples differ by chance is known as sampling error, and its variability is measured by the standard error of the estimate. There is about a 90-percent chance, or level of confidence, that an estimate based on a sample will differ by no more than 1.6 standard errors from the true population value because of sampling error. BLS analyses are generally conducted at the 90-percent level of confidence.

The CPS data also are affected by nonsampling error. Nonsampling error can occur for many reasons, including the failure to sample a segment of the population, inability to obtain information for all respondents in the sample, inability or unwillingness of respondents to provide correct information, and errors made in the collection or processing of the data. For example, respondents may round their hourly earnings to whole dollars when answering survey questions.